Canada: Miller sues to end Canada licensing pact with Molson
Miller Brewing Co. is suing brewer Canadian business partner Molson and its U.S. parent company in order to terminate Molson's licensing and distribution arrangement with Miller in Canada, The Business Journal of Milwaukee and American City Business Journals Inc announced on December 19.
Milwaukee-based Miller said it filed a complaint Tuesday in U.S. District Court for the Eastern District of Wisconsin in Milwaukee against the Molson Coors Brewing Co., Molson Inc., and Molson Canada 2005. Miller is seeking a declaratory judgment that it is entitled to terminate its licensing agreement with Molson, along with damages it specifies only as "in excess of $75,000."
Miller claims that after the merger of Molson Inc., Montreal, with one of Miller's main domestic competitors -- Golden, Colo.-based Adolph Coors Co. -- incentives for Molson to sell Miller's brands in Canada are "dramatically reduced," according to a Miller statement released Monday.
At the time the Molson/Coors deal was announced in July 2004, Molson brewed several Miller brands in Canada, a deal that had been in place since 1989. An official with Molson Coors Brewing could not immediately be reached for comment.
Miller now alleges that Molson Coors and Molson are "unwilling to promote" Miller's flagship Miller Lite brand in Canada, despite the fact that the light beer category has grown to more than 14 percent of all beer sales in that country. Molson Coors has forecasted light beer sales to rise to 25 percent of the market.
The distribution deal also puts Miller in the position of providing proprietary information about its beers, such as recipes, U.S. production cost and strategies, to its competitors, according to the lawsuit filing.
Miller also contends that provisions of the license agreement prohibiting Molson from being associated with any beer portrayed as "cold-filtered" in Canada or the U.S. have been breached. Miller's Miller Genuine Draft brand is promoted as cold-filtered, as are Coors' brands Coors Light and Keystone Light.
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